Tue, 07 Feb 2023 Today's Paper

US oil output back near records, challenging OPEC

20 May 2017 12:01 am - 0     - {{hitsCtrl.values.hits}}

A A A

AFP: American oil production is approaching record levels again, led by shale projects, potentially foiling efforts by OPEC to support prices.
Oil prices were boosted this week after Saudi Arabia and Russia signaled they intend to extend an agreement to limit output. That raised expectations the Organization of the Petroleum Exporting Countries will sign off on prolonging the existing production agreement at its May 25 meeting. 
Petroleum exporters’ efforts to push prices higher have helped American producers as well, especially shale producers who can react quickly to market developments. Oil prices currently trade between US$45 and US$55 a barrel, up from US$26 a barrel in February 2016.
American shale has been particularly responsive to the higher price range because it is less capital intensive than other ventures.
“With respect to shale oil, the investment decisions and cycles are shorter because it only takes a month to drill and bring a well online,” said Ben Shattuck of Wood Mackenzie.
“As prices either move up or down, the industry can be pretty nimble in terms of responding to that.” 

US production has risen 850,000 barrels per day (bpd) from its 2016 lows to 9.3 million bpd now, not far from the all-time record set in 2015.
US producers have streamlined spending and been more selective in the wells they drill. 
The cost to drill for shale has fallen by more than one-third in the last two years, analysts said. New wells have an average break-even price between US$43 and US$45 a barrel in the current market, said Reed Olmstead of IHS Markit.
“We are only drilling the best locations but also we are drilling bigger wells,” Olmstead said in an interview. Operators are “really pushing the limits of what they can get the rocks to produce.”
New techniques to boost the flow of oil means a well in a region like he Permian Basin in Texas and New Mexico “has roughly twice the productivity as the same well in late 2014,” he said.
Martijn Rats of Morgan Stanley said the US rig count has doubled in a year, making it the “strongest recovery in the last 30 years.” 
Analysts estimate that every dollar that oil prices rise between US$45 and US$55 a barrel results in an additional 1.2 billion barrels that become economic to produce.
But too much shale output will threaten to drive down oil prices back down again, and at a certain point more drilling means higher production costs as more 
operators hire rigs.
Art Abramov, vice president of analysis at Rystad Energy, reported “steep cost escalation” in several key segments, including pressure pumping and purchase of tubular goods.

 


Order Gifts to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Vegetables, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Sending Money,Online Books, Delivery Service, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop Sri Lanka

  Comments - 0

Order Gifts to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Vegetables, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Sending Money,Online Books, Delivery Service, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop Sri Lanka

Add comment

Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Reply To:

Name - Reply Comment




Order Gifts to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Vegetables, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Sending Money,Online Books, Delivery Service, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop Sri Lanka

Pain and punishment

Should we spare the rod and spoil the child? Does it really happen? Children

Health System in the emergency room

Sandya Kumari from Kotahena has been experiencing chest pains since 2015 and

Canada’s targeted sanctioning of Gota and Mahinda

History was made last week when two former executive presidents of Sri Lanka

SC judgement on Easter attack: Court rules negligence stood in the way of avoiding most heinous crime

“On the ill-fated day of 21st of April 2019, this island home was awoken ru